- Claiming 400% tax deductions/allowances for expenditure on equipment that does not fall under the PIC IT and Automation Equipment List
Businesses can only claim for expenditure on prescribed IT and automation equipment, i.e. equipment listed in the PIC IT and Automation Equipment List (232KB). The following items are not prescribed IT and automation equipment and cannot be claimed:
- Air-conditioning unit purchased from retail store
- Motor vehicle
- Furniture and fittings
- Renovation and refurbishment cost (e.g. cost paid to install office workstation)
- Digital camera
- Closed circuit TV (CCTV)
- Uninterrupted power supply (UPS)
- Refrigerated display
You may wish to perform a search with our PIC IT and Automation Equipment Search by Examples to find out if your equipment is eligible to claim under the PIC Scheme. New!
If an equipment your business has invested in/plans to invest in is not in the prescribed list but automates or mechanises your business processes, you can request IRAS' approval for the equipment to qualify for PIC (44KB). Approval is granted on a case-by-case basis. Upon approval and having incurred the expenditure on that equipment, you may proceed with the PIC claim.
- Duplicate claim for both PIC cash payout and 400% tax deductions/allowances on the same expenditure under any of the six PIC activities
Businesses can either convert their qualifying expenditure into a cash payout or claim the 400% tax deductions/allowances against their income. They cannot claim both the cash payout and 400% tax deductions/allowances on the same expenditure.
For example, a company that has claimed PIC cash payout on the training cost of $1,000 cannot again claim a 400% tax deduction on the same training expense against its income in its tax return. Please note that the $1,000 is no longer available as a tax deduction and the business has to add back the amount in its tax computation. Please refer to our Worked Examples (scenario B).
- Claiming 500% instead of 400% tax deductions/allowances under any of the six PIC activities
Businesses can receive a total of 400% tax deductions/allowances (comprising 100% normal deduction and 300% additional tax deduction) on their qualifying expenditure. Please do not claim 400% additional tax deduction on expenditure which has already been deducted as an expense (100% normal deduction) against the income.
- Claiming PIC on non-qualifying expenditure
Businesses should check that an expense qualifies for PIC before making a claim.
Non-qualifying expenditure includes:
- course fees on training attended by the business owners
- GST paid by a GST-registered business on an item qualifying for PIC (GST component is not claimable for income tax purpose as the GST-registered business can claim input tax in its GST return)
- cost of PIC IT and Automation Equipment not incurred during the relevant accounting period of the Year of Assessment (YA) of claim
- cost of PIC IT and Automation Equipment (i.e. principal repayments for equipment acquired on hire-purchase terms) not incurred during the relevant accounting period of the YA of claim
- cost that is not applicable to the PIC IT and Automation Equipment such as warranty fee, service maintenance fee or consumable
- consulting fees unrelated to the development of the PIC IT and Automation Equipment
- expenses that have been defrayed by a grant or subsidy received from the Government or any statutory board. Expenses qualifying for PIC benefits must be net of such grant or subsidy.
IRAS takes a serious view of any abuse of PIC scheme
IRAS takes a serious view of taxpayers who defraud the government. Offenders convicted of PIC fraud will have to pay a penalty of up to four times the amount of cash payout fraudulently obtained, and a fine of up to $50,000 and/or imprisonment of up to five years.
List of offenders convicted of PIC abuse: